In Re Pratt

524 F.3d 580, 2008 WL 933633
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 23, 2008
Docket07-10457
StatusPublished
Cited by74 cases

This text of 524 F.3d 580 (In Re Pratt) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Pratt, 524 F.3d 580, 2008 WL 933633 (5th Cir. 2008).

Opinion

524 F.3d 580 (2008)

In the Matter of: Jack E. PRATT, Jr., Debtor.
The Cadle Company, Appellant,
v.
Jack E. Pratt, Jr., Appellee.

No. 07-10457.

United States Court of Appeals, Fifth Circuit.

April 8, 2008.

*582 Bruce William Akerly (argued), Linda D. Thai, Bell, Nunnally & Martin, Dallas, TX, for Appellant.

Richard Bernard Schiro (argued), Law Offices of Richard B. Schiro, Dallas, TX, for Pratt.

Before WIENER, BARKSDALE, and DENNIS, Circuit Judges.

WIENER, Circuit Judge.

Appellant The Cadle Company ("Cadle") appeals the bankruptcy court's denial of its motion for sanctions against Richard B. Schiro ("Schiro"), counsel for the debtor in *583 the underlying Chapter 7 bankruptcy proceeding. Cadle also appeals the bankruptcy court's award of attorney's fees to Schiro. As Cadle failed to comply with the service requirement of Rule 9011, we affirm the denial of sanctions. We do not have jurisdiction to review the award of attorney's fees, however, because, on appeal, the district court remanded that issue to the bankruptcy court for significant further proceedings.

I. Facts and Proceedings

This motion for sanctions and subsequent award of attorney's fees is the result of a longstanding fight between Cadle and the Pratt family. The history of this case is long and convoluted, but a short recitation of the facts will suffice to resolve the current issues on appeal.

On August 16, 2000, Jack E. Pratt, Jr. ("Pratt Jr.") filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code. Schiro represented Pratt Jr. in the bankruptcy proceeding. Several months later, Cadle, one of Pratt Jr.'s creditors, filed an adversary action against him, objecting to his bankruptcy discharge. Cadle argued that the discharge should be denied because, among other things, Pratt Jr. never disclosed his right to payments under his mother's will. At trial, Schiro presented testimony that Pratt Jr. was not entitled to any distributions from his mother's estate because he owed more for loans made to him by his mother during her lifetime than any distributions to which he would have been entitled under the will. The bankruptcy court determined that Cadle had failed to meet its burden of showing, by a preponderance of the evidence, that Pratt Jr.'s debts should be nondischargeable.[1]

After the bankruptcy court rendered a decision in the Pratt Jr. action, Cadle learned that Pratt Jr. had received loans from his mother's estate after her death. Cadle filed a motion for Rule 9011 sanctions against Schiro in the bankruptcy court where the Pratt Jr. adversary proceeding was tried.[2] The bankruptcy court denied Cadle's motion for sanctions for failure to serve Schiro with a copy of the motion twenty-one days prior to filing with the court. Alternatively, the bankruptcy court noted that Cadle was unable to establish a Rule 9011 violation because the original testimony regarding Pratt Jr.'s distributions from the will was both credible and persuasive. Pursuant to Rule 9011, the bankruptcy court awarded Schiro attorney's fees for defending the motion for sanctions.

On appeal, the district court affirmed the bankruptcy court's denial of sanctions based on Cadle's failure to comply with the service requirement of Rule 9011. Alternatively, the district court determined that Cadle's motion for sanctions was untimely, as it was filed after the conclusion of the case. In a footnote to the opinion, the district court observed that Cadle had also failed to prove a Rule 9011 violation. The district court held, however, that the bankruptcy *584 court had abused its discretion by awarding attorney's fees and expenses to Schiro without allowing Cadle the right to examine, question, or provide argument against the claimed fees and expenses. The district court remanded the award of attorney's fees to the bankruptcy court for a determination of "whether the award is warranted and, if so, whether the amounts requested by Schiro for attorney's fees and expenses are reasonable and necessary." Cadle appeals (1) the bankruptcy court's denial of its motion for Rule 9011 sanctions, and (2) the bankruptcy court's award of attorney's fees in favor of Schiro.

II. Analysis

A. Standard of Review

We apply the same standard of review to the bankruptcy court's findings of fact and conclusions of law as applied by the district court.[3] The bankruptcy court's findings of fact are reviewed for clear error; its conclusions of law are reviewed de novo.[4] As "the imposition of sanctions is a matter of discretion for the bankruptcy court," we "review under an abuse of discretion standard."[5] If we were to reach the bankruptcy court's award of attorney's fees, we would review it for abuse of discretion.[6]

B. Analysis

1. Jurisdiction

We must first address the question of appellate jurisdiction. Although neither party raised the issue on appeal, we are required "`to examine the basis for our jurisdiction, sua sponte, if necessary.'"[7]

Under 28 U.S.C. § 158(d), we have jurisdiction to hear appeals from all "final decisions, judgments, orders, and decrees." We have held that "[w]hen a district court sitting as a court of appeals in bankruptcy remands a case to the bankruptcy court for significant further proceedings, the remand order is not `final' and therefore not appealable under § 158(d)."[8] Here, the district court remanded the issue of attorney's fees to the bankruptcy court. We must therefore determine whether such a remand requires "significant further proceedings."

To determine what constitutes significant further proceedings, we distinguish between "those remands requiring the bankruptcy court to perform `judicial functions' and those requiring mere `ministerial functions.'"[9] If the remand requires the bankruptcy court to perform judicial functions, such as additional fact-finding, it is not a final order and therefore it is not appealable to this court.[10] Remands that involve only ministerial proceedings, "such as the entry of an order by the bankruptcy court in accordance with the district court's decision," are considered final.[11] In some instances, a remand for the calculation of attorney's fees may be considered a ministerial function; however, "a remand requiring such a calculation is not final if it *585 necessitates further factual development or other significant judicial activity involving the exercise of considerable discretion, or is likely to generate a new appeal or affect the issue that the disappointed party wants to raise on appeal from the order of remand."[12]

In the instant case, the district court remanded the bankruptcy court's order to determine "whether the award [of attorney's fees] is warranted and, if so, whether the amounts requested by Schiro for attorney's fees and expenses are reasonable and necessary." Such an order requires Schiro to submit additional evidence regarding his fees and allows Cadle the right to examine, question, or otherwise argue against the claimed fees and expenses. Cadle may also choose to appeal the bankruptcy court's decision on remand. As the remand order requires the bankruptcy court to perform judicial functions, we do not have jurisdiction to review the award of attorney's fees.

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Bluebook (online)
524 F.3d 580, 2008 WL 933633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-pratt-ca5-2008.