Gebhardt v. Hardigan

512 B.R. 385, 2014 WL 1320006
CourtDistrict Court, S.D. Georgia
DecidedMarch 31, 2014
DocketNos. CV413-125, CV413-130
StatusPublished
Cited by3 cases

This text of 512 B.R. 385 (Gebhardt v. Hardigan) is published on Counsel Stack Legal Research, covering District Court, S.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gebhardt v. Hardigan, 512 B.R. 385, 2014 WL 1320006 (S.D. Ga. 2014).

Opinion

ORDER

J. RANDAL HALL, District Judge.

Before the Court are Appellant Guy G. Gebhardt’s Motion for Leave to Appeal (CV413-125, Doc. 6) and Appellant Sun-trust Bank’s Motion for Leave to Appeal (CV413-130, Doc. 2). Following the Court’s determination that the Bankruptcy Judge’s March 29, 2012 consolidated order (CV413-125, Doc. 1, Attach. 1; CV413-130, Doc. 2 at 5-43) (the “Consolidated Order”) is an interlocutory order, these motions are GRANTED. Appellants have also filed Joint Motions to Consolidate this action. (CV413-125, Doc. 14; CV413-130, Doc. 8). Appellee has filed responses in opposition to the requested consolidation. (CV413-125, Doc. 16; CV413-130, Doc. 12.) After careful consideration, Appellants’ Motions to Consolidate are GRANTED. In light of this consolidation, Appel-lee’s Motion to Dismiss Gebhardt’s appeal as untimely (CV413-125, Doc. 9) is DENIED. The above-styled actions are hereby CONSOLIDATED for purposes of the Court’s appellate review of the Consolidated Order. Finally, Appellant Suntrust Bank has filed a Motion to Supplement Record On Appeal (CV413-130, Doc. 11), to which Appellee is opposed. Upon due consideration of the Motion and Response, the Motion is GRANTED.

I. MOTIONS TO APPEAL

The Court has appellate jurisdiction over both final and interlocutory orders of a Bankruptcy Judge. See 28 U.S.C. §§ 158(a)(1), 158(a)(3). However, interlocutory appeals may only be made with leave of the Court. 28 U.S.C. § 158(a)(3). In general, for an order to be final, it must end the litigation on the merits. Jove Eng’g v. I.R.S., 92 F.3d 1539, 1547 (11th Cir.1996). In the bankruptcy context, however, an order is final if it “completely resolves all of the issues pertaining to a discrete claim, including issues as to the proper relief.” In re Atlas, 210 F.3d 1305, 1308 (11th Cir.2000). Because the Consolidated Order denied Appellants’ [387]*387Motions to Dismiss for Abuse under 11 U.S.C. § 707(b) as well as their Motions to Convert the ease to a Chapter 11 proceeding under 11 U.S.C. § 706(b), the Court must determine whether these decisions are interlocutory or final.

Whether an order is final or interlocutory is not always easy to determine, especially in the bankruptcy context. Other circuits have found that a denial of a motion to dismiss a Chapter 7 case is generally interlocutory because the resultant effect is that the case merely proceeds in the bankruptcy court. See, e.g., In re Jartran, Inc., 886 F.2d 859 (7th Cir.1989); In re Phillips, 844 F.2d 280 (5th Cir.1988); In re 405 N. Bedford Drive Corp., 778 F.2d 1874, 1379 (9th Cir.1985). More importantly, the Eleventh Circuit found in In re Donovan that it did not have appellate jurisdiction because a bankruptcy court’s denial of a creditor’s motion to dismiss for abuse under 11 U.S.C. § 707(b)(3) was not a final order.1 532 F.3d 1134 (11th Cir. 2008).

Here, Appellants have both filed Motions for Leave to Appeal because of the Eleventh Circuit’s holding in Donovan. Admittedly, the Eleventh Circuit stated in Donovan that “the finality requirement is met where practical considerations require it.” 532 F.3d at 1137 n. 1. However, while the creditor in Donovan felt that the denial of her motion to dismiss would effectively eliminate any chance to recover, the Eleventh Circuit found no reason she could not have obtained meaningful appellate review after the case was dismissed. Id. The Eleventh Circuit reasoned that the creditor’s unlikelihood of recovery was the result of the facts of the case and not bankruptcy procedure. Id. at 1137 n. 2. In short, the Eleventh Circuit found that the denial of the motion “did not conclusively resolve the bankruptcy case as a whole, nor did [it] resolve any adversary proceeding or claim.” Id. at 1137. Accordingly, the denial of the Appellants’ Motions to Dismiss should likewise be treated as interlocutory because it does not eliminate either of Appellants’ claims.

The determination of whether a denial of a motion to convert a case to Chapter 11 pursuant to 11 U.S.C. § 706(b) is interlocutory or final is a matter of first impression in this circuit. At least one other circuit has concluded that, given the difficulty in appealing a decision after a debtor’s assets have been liquidated, a denial of a motion to convert is a final, ap-pealable decision. See In re Copper, 426 F.3d 810 (6th Cir.2005). But see In re Salem, 465 F.3d 767, 774 (7th Cir.2006) (order denying conversion found to be interlocutory in light of a venue issue). However, the Eleventh Circuit found this same line of reasoning unpersuasive in Donovan. In finding the denial of a motion to dismiss interlocutory, the Eleventh Circuit reasoned that “[b]y denying her motion to dismiss, the bankruptcy court permitted the Chapter 7 case to continue.” Id. at 1137. Here, the effect of the Bankruptcy Judge’s denial of Appellants’ Motions to Convert is the same: the case will continue to proceed under Chapter 7. See also In re Kutner, 656 F.2d 1107, 1110-11 (5th Cir.1981)2 (denial of a motion to convert from chapter 11 to 13 was procedural and thus considered interlocutory). Consequently, the Court finds it appropriate to [388]*388treat the denial of Appellants’ Motions to Convert as interlocutory as well.

Because the Court finds both decisions contained in the Consolidated Order to be interlocutory, the Court turns to whether leave to appeal is merited in this case. The standards for whether a district court should grant an interlocutory appeal from a bankruptcy court pursuant to 28 U.S.C. § 158(a)(3) are the same as those applicable to interlocutory appeals made from the district courts to the courts of appeal under 28 U.S.C. § 1292(b). In re Charter Co., 778 F.2d 617, 620 n. 5 (11th Cir.1985); 28 U.S.C.

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Bluebook (online)
512 B.R. 385, 2014 WL 1320006, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gebhardt-v-hardigan-gasd-2014.