In Re Kimberly P. Budd

• Court: District Court, District of Columbia
• Decided: September 4, 2018
• Docket: Civil Action No. 2018-0270
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _______________________________ ) IN RE: KIMBERLY BUDD, ) ) DEBTOR. ) -------------------------------) ) AIHUA PALMOUR, ) ) Appellant, ) ) v. ) Civil Action No. 18-270 (EGS) ) KIMBERLY BUDD, ) ) Appellee. ) )

MEMORANDUM OPINION AND ORDER

In November 2016, Appellant Aihua Palmour initiated an

adversary proceeding against Debtor-Appellee Kimberly Budd in

the United States Bankruptcy Court for the District of Columbia

(“Bankruptcy Court”). After a trial, the Bankruptcy Court

dismissed Ms. Palmour’s complaint. Months later, the Bankruptcy

Court also denied Ms. Palmour’s motion for reconsideration. On

February 5, 2018, Ms. Palmour, proceeding pro se, appealed the

Bankruptcy Court’s dismissal to this Court. Pending before the

Court is Ms. Budd’s motion to dismiss Ms. Palmour’s appeal.

After considering the motion, the response and reply thereto,

the record, and the applicable law, the Court hereby GRANTS the

motion to dismiss.

1 I. Background

In May 2012, Ms. Palmour sued Ms. Budd in the Superior

Court of the District of Columbia for breach of contract arising

out of a purportedly fraudulent real estate transaction. A.R.,

ECF No. 2-1 at 79-80. 1 In May 2013, Superior Court Judge Michael

Rankin entered a $63,788 judgment against Ms. Budd. Id. at 78.

Before Ms. Palmour could collect, Ms. Budd filed for bankruptcy

and listed Ms. Palmour’s judgment as a dischargeable, consumer

debt. See In re Budd, Bankruptcy Case No. 16-429-SMT. In

response, Ms. Palmour initiated an adversary proceeding in

Bankruptcy Court on November 25, 2016. See Palmour v. Budd,

Adversary Proceeding No. 16-10039-SMT. In her complaint, Ms.

Palmour argued that her $63,788 judgment against Ms. Budd was

not discharged by Ms. Budd’s bankruptcy because Ms. Budd had

willfully and maliciously injured her property via a fraudulent

real estate investment scheme. See A.R., ECF No. 2-1 at 1-5

(citing 11 U.S.C. § 523(a)(2),(6)).

After a trial, the Bankruptcy Court dismissed Ms. Palmour’s

complaint on August 3, 2017. See id. at 203. On August 16, 2017,

Ms. Palmour filed a motion for reconsideration, then proceeding

pro se. See id. at 207-15. On December 29, 2017, the Bankruptcy

1 When citing electronic filings throughout this Opinion, the Court cites to the ECF page number, not the page number of the filed document. 2 Court denied Ms. Palmour’s motion for reconsideration, id. at

239-64, but its order was not entered on the docket until

January 3, 2018, see Docket No. 25, Adversary Proceeding No. 16-

10039. On February 2, 2018, Ms. Palmour filed a notice of

appeal. See ECF No. 1; A.R., ECF No. 2-1 at 265-66; Docket No.

27, Adversary Proceeding, 16-10039.

In response, Ms. Budd filed a motion to dismiss Ms.

Palmour’s appeal. See Appellee’s Mot., ECF No. 4. The motion is

now ripe for review.

II. Analysis

Ms. Budd argues that the appeal must be dismissed because

Ms. Palmour failed to file a notice of appeal within fourteen

days of the Bankruptcy Court’s order denying her motion for

reconsideration, as required by Federal Rule of Bankruptcy

Procedure 8002. See Appellee’s Mot., ECF No. 4. Accordingly, Ms.

Budd argues that this Court lacks jurisdiction over Ms.

Palmour’s appeal because failure to file a notice of appeal

within the fourteen days is a “jurisdictional barrier.” Id. at

4. In her response, Ms. Palmour argues that she never received

notice of the Bankruptcy Court’s order denying her motion for

reconsideration. See Appellant’s Opp’n, ECF No. 5. She contends

that she filed a notice of appeal only two days after she called

the clerk’s office and learned that the Bankruptcy Court had

denied her motion. See id. at 1. Because her failure to timely

3 appeal “was due to the court’s error,” she argues that this

Court should consider her appeal. Id.

28 U.S.C. § 158(a) confers jurisdiction on federal district

courts to hear appeals from final judgments, orders, and decrees

“entered in cases and proceedings referred to the bankruptcy

judges.” Section 158(c)(2) provides that appeals “shall be taken

. . . in the time provided by Rule 8002 of the Bankruptcy

Rules.” Federal Rule of Bankruptcy Procedure 8002(a) mandates

that “a notice of appeal must be filed with the bankruptcy clerk

within 14 days after the entry of the judgment, order, or decree

being appealed.”

Appellants may toll the Rule 8002 appeal deadline by filing

one of four motions within fourteen days after the judgment is

entered: (1) a motion to amend pursuant to Bankruptcy Rule 7052;

(2) a motion to alter or amend the judgment under Bankruptcy

Rule 9023; (3) a motion for a new trial under Bankruptcy Rule

9023; or, as applicable here, (4) a motion for relief

under Bankruptcy Rule 9024—that is, Federal Rule of Civil

Procedure 60(b). Fed. R. Bankr. P. 8002(b). If the appellant

files one of these motions, as Ms. Palmour did when she filed

her motion for reconsideration, “the time to file an appeal runs

for all parties from the entry of the order disposing of the . .

. motion.” Id. Thus, Ms. Palmour had fourteen days to appeal the

4 Bankruptcy Court’s judgment once it denied her motion for

reconsideration.

Finally, “the Bankruptcy Court may extend the time to file

a notice of appeal upon a party’s motion.” Fed. R. Bankr. P.

8002(d)(1). 2 The Bankruptcy Court may extend the fourteen-day

deadline if the appellant’s motion is filed “within the time

prescribed by this rule; or within 21 days after that time, if

the party shows excusable neglect.” Id.

It is undisputed that Ms. Palmour did not file her notice

of appeal within fourteen days of the Bankruptcy Court’s January

3, 2018 order denying her motion for reconsideration, as

required by Bankruptcy Rule 8002(a). See Appellant’s Opp’n, ECF

No. 5; see also Docket, Adversary Proceeding No. 16-10039

(notice of appeal filed on February 2, 2018). It is also

undisputed that Ms. Palmour did not file a motion for an

extension of time within fourteen days of the Bankruptcy Court’s

January 3, 2018 order, or within twenty-one days after that

time, as required by Bankruptcy Rule 8002(d). See id. At issue,

then, is whether this Court may consider Ms. Palmour’s appeal

notwithstanding her undisputed failure to adhere to Rule 8002.

2 A Bankruptcy Court may not extend the time to file a notice of appeal for certain judgments or orders inapplicable here. See Fed. R. Bankr. P. 8002(d)(2). 5 Ms. Budd argues that the Court lacks jurisdiction over Ms.

Palmour’s appeal because Rule 8002 is “mandatory and

jurisdictional” and thus, the Court may not consider whether Ms.

Palmour received notice of the Bankruptcy Court’s order denying

her motion for reconsideration. Appellee’s Reply, ECF No. 6 at

2. Ms. Palmour does not respond to this argument, beyond

asserting her lack of notice. See Appellant’s Opp’n, ECF No. 5.

Failure to comply with a jurisdictional time prescription

“deprives a court of adjudicatory authority over the case,

necessitating dismissal.” Hamer v. Neighborhood Hous. Servs. of

Chicago, 138 S. Ct. 13, 17 (2017)(citations omitted). Because

Congress alone “may determine a lower federal court’s subject-

matter jurisdiction,” id., a “time prescription governing the

transfer of adjudicatory authority from one Article III court to

another” is jurisdictional only if it “appears in a statute,”

id. at 20 (quotations and citations omitted). On the other hand,

a “time limit not prescribed by Congress ranks as a mandatory

claim-processing rule.” Id. at 17. Of course, 28 U.S.C. § 158,

which references Bankruptcy Rule 8002, does not govern appeals

from Article III courts. Instead, it governs the transfer of

adjudicatory authority from an Article I court (the bankruptcy

court) to either an Article III court (the district court) or

another Article I court (the bankruptcy appellate panel). “In

cases not involving the time bound transfer of adjudicatory

6 authority from one Article III court to another,” the Supreme

Court has applied the “clear-statement rule.” Hamer, 138 S. Ct.

at 20 n.9. The clear-statement rule provides that “‘[a] rule is

jurisdictional if the Legislature clearly states that a

threshold limitation on a statute's scope shall count as

jurisdictional.’” Id. (quoting Gonzalez v. Thaler, 565 U.S. 134,

141 (2012)(citations omitted)).

In the wake of Hamer, several courts have concluded that

the time limitation in Bankruptcy Rule 8002 is jurisdictional

because the deadline is imposed by 28 U.S.C. § 158(c)(2), which

contains a clear statement of congressional intent. See, e.g.,

In re Jackson, 585 B.R. 410, 416-19 (B.A.P. 6th Cir. 2018)

(“Every circuit court that has considered this question has come

to the conclusion that the time limit for appeals from

bankruptcy court decisions is statutory.”). However, the Court

need not determine at this time whether the time limit in Rule

8002 is jurisdictional. Assuming the appeal deadline is not

jurisdictional, it is instead a mandatory claim-processing rule.

See Hamer, 138 S.Ct. at 17-18. As such, the Court must still

enforce the time limit, as it was properly invoked. See id. (“if

properly invoked, mandatory claim-processing rules must be

enforced”). Indeed, “claim-processing rules thus assure relief

to a party properly raising them, but do not compel the same

result if the party forfeits them.” Eberhart v. United

7 States, 546 U.S. 12, 19 (2005) (per curiam). Therefore, because

Ms. Budd properly invoked Rule 8002, the Court must enforce it

here. See Miller v. District of Columbia, 891 F. Supp. 2d 8, 11

n.4 (D.D.C. 2012)(“The Court need not reach the District's

contention that Rule 8002 is jurisdictional in nature. Even if

considered a claim-processing rule, the requirements of Rule

8002 are unalterable in light of the District's timely

objection.”)(citing cf. Youkelsone v. Fed. Deposit Ins.

Corp., 660 F.3d 473, 476 (D.C. Cir. 2011)).

Ms. Palmour contends that the Court should forgive her late

appeal because the Bankruptcy Court erred in not notifying her

that it had denied her motion for reconsideration, which

commenced the running of the Rule 8002 clock. Appellant’s Opp’n,

ECF No. 5 at 1. Unfortunately, it does indeed appear undisputed

that Ms. Palmour did not receive notice of the Bankruptcy

Court’s order. The “certificate of notice” entered by the clerk

states that notice by mail was sent only to Ms. Budd and the

U.S. Trustee and notice by email was sent only to Ms. Budd’s

attorney. Docket No. 26, Adversary Proceeding 16-10039. Thus,

due to court error, Ms. Palmour did not receive notice that the

Bankruptcy Court had denied her motion for reconsideration.

However, this Court may not excuse her untimely appeal.

In cases where an appellant can demonstrate excusable

neglect, as Ms. Palmour probably could have, Rule 8002(d)(1)

8 requires the appellant to file a motion for an extension of time

within thirty-five days of the Bankruptcy Court’s order. See

Fed. R. Bankr. P. 8002(d)(1) (comprised of the 14 days for

filing an appeal pursuant to Rule 8002(a)(1) plus the 21 days

thereafter for filing a motion to enlarge time based on

excusable neglect). Ms. Palmour learned about the Bankruptcy

Court’s order denying her motion for reconsideration within this

thirty-five day window. See Appellant’s Opp’n, ECF No. 5 at 1

(stating that Ms. Palmour learned about the Bankruptcy Court’s

January 3, 2018 denial on January 31, 2018). However, Ms.

Palmour did not file a motion for an extension of time to file a

notice of appeal. See Docket, Adversary Proceeding 16-10039.

Rule 8002 “‘does not allow a party to claim excusable neglect

after the time period has expired.’” In re Allen, Case No. 16-

23, 2018 WL 1940142 at *3 (Bankr. D.D.C. April 20, 2018)

(alterations omitted)(quoting In re Caterbone, 640 F.3d 108, 114

(3d Cir. 2011))(citing In re Herwit, 970 F.2d 709, 710 (10th

Cir. 1992) (finding that the district court lacked jurisdiction

to consider the merits of an appellant's untimely appeal where

the appellant had failed to file a motion for extension of

time); In re LBL Sports Ctr., Inc., 684 F.2d 410, 412–13 (6th

Cir. 1982) (ruling that the district court erred in considering

the issue of excusable neglect when no motion for an extension

of time on that basis was filed in the bankruptcy court)).

9 Therefore, the Court may not consider whether Ms. Palmour’s

failure to timely appeal may be excused. 3

Although Bankruptcy Rule 9022 states that “immediately on

the entry of a judgment or order the clerk shall serve a notice

of entry . . . on the contesting parties,” it also mandates that

“lack of notice of the entry does not affect the time to appeal

or relieve or authorize the court to relieve a party for failure

to appeal within the time allowed, except as permitted in Rule

8002.” Fed. R. Bankr. P. 9022(a)(emphasis added). Thus,

“[n]otification by the clerk is merely for the convenience of

litigants. And lack of such notification in itself has no effect

upon the time for appeal.” In re Hilliard, 36 B.R. 80, 83

(S.D.N.Y. 1984) (quotations omitted). “Litigants have only to

check the court's electronic docket once a month in order to

protect their interests; this step will ensure that, even if

notice miscarries, a request for additional time can be made

within the 35 days allowed by Rule 8002(d)(1).” Netzer v. Office

of Lawyer Regulation, 851 F.3d 647,649 (7th Cir. 2017)(finding

that “courts lack an ‘equitable’ power to contradict the

3Moreover, the Court may not treat Ms. Palmour’s untimely appeal as a motion to extend the time to appeal because Rule 8002(d) provides that only the Bankruptcy Court may extend the time to appeal. Fed. R. Bankr. P. 8002(d); see also Netzer v. Office of Lawyer Regulation, 851 F.3d 647,649 (7th Cir. 2017)(“even if he had [filed a motion for extension] in time, still the power to decide [the motion] would have belonged to the bankruptcy judge, not to the district judge or the court of appeals”). 10 bankruptcy statutes and rules”)(citing Law v. Siegel, 571 U.S.

415, 421 (2014)).

Notwithstanding the clerk’s regrettable error in not

sending notice to Ms. Palmour, the Court must grant Ms. Budd’s

motion to dismiss Ms. Palmour’s appeal.

III. Conclusion and Order

Accordingly, for the reasons set forth in this Memorandum

Opinion and Order, Ms. Budd’s motion to dismiss Ms. Palmour’s

appeal is GRANTED. Ms. Palmour’s case is closed. This is a

final, appealable Order.

SO ORDERED.

Signed: Emmet G. Sullivan United States District Judge September 4, 2018