In re Sobczak-Slomczewski

826 F.3d 429, 75 Collier Bankr. Cas. 2d 1508, 2016 U.S. App. LEXIS 10664, 62 Bankr. Ct. Dec. (CRR) 187, 2016 WL 3245340
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 13, 2016
DocketNo. 15-1162
StatusPublished
Cited by46 cases

This text of 826 F.3d 429 (In re Sobczak-Slomczewski) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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In re Sobczak-Slomczewski, 826 F.3d 429, 75 Collier Bankr. Cas. 2d 1508, 2016 U.S. App. LEXIS 10664, 62 Bankr. Ct. Dec. (CRR) 187, 2016 WL 3245340 (7th Cir. 2016).

Opinion

PER CURIAM.

Debtor Robert Sobczak-Slomczewski appeals the district court’s dismissal of his untimely appeal from a bankruptcy court’s order. The district court determined that he failed to file his notice of appeal within the 14-day period required by Fed. R. Bankr. P. 8002(a)(1) and dismissed the appeal for lack of jurisdiction. Because the district court did not err, we affirm.

Sobczak-Slomczewski was the president and owner of Dells Hospitality, Inc., which borrowed approximately $12,600,000 from Bear Stearns Commercial Mortgage, Inc., to purchase the Hilton Garden Inn in Lake Delton, Wisconsin. Sobczak-Slomczewski agreed to indemnify Bear Sterns against any and all losses arising out of certain actions including fraud, misrepresentation, misapplication, and conversion. Bear Stearns sold the loan to Maiden Lane Commercial Mortgage-Backed Securities Trust 2008-1, a grantor trust of which U.S. Bank National Association is Trustee, who subsequently reassigned the loan to a Delaware limited liability company called WDH, LLC.

Dells Hospitality defaulted on the loan and Maiden Lane filed an action in Wisconsin state court seeking foreclosure. Around this time Sobczak-Slomczewski directed the hotel’s independent management company to transfer $r677,000 to a corporate entity he owned and controlled. After a foreclosure sale was held, WDH amended the complaint to add claims against Sobczak-Slomczewski for theft and conversion. Sobczak-Slomczewski removed the claims to the Western District of Wisconsin, and the district court found that Sobczak-Slomczewski had converted and embezzled the $677,000.

Sobczak-Slomczewski then petitioned for bankruptcy in the Northern District of Illinois, and WDH filed an adversary proceeding seeking to have the $677,000 debt found non-dischargeable. On August 5, 2014, the bankruptcy court granted summary judgment to WDH. The court concluded that the $677,000 debt owed by Sobczak-Slomczewski was not dischargea-ble in his Chapter 7 bankruptcy petition because the elements necessary to find the debt non-dischargeable under 11 U.S.C. [431]*431§ 523(a)(4) and (a)(6) already had been litigated and proven in the Wisconsin federal court proceedings.

Sobczak-Slomczewski filed a notice of appeal on August 20, 15 days after the bankruptcy court entered its order. WDH then moved to dismiss the appeal as untimely.

The district court agreed with WDH that the appeal was untimely, granted the motion to dismiss, and concluded that Rule 8002(a)’s 14-day deadline was jurisdictional. The court acknowledged that not all notice-of-appeal deadlines should be “unquestioningly accepted]” as jurisdictional, especially in light of recent Supreme Court cases that sought to distinguish genuinely jurisdictional deadlines from those that do not actually strip a court of jurisdiction, and rather are merely claim-processing rules. See Bowles v. Russell, 551 U.S. 205, 208-13, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007); Kontrick v. Ryan, 540 U.S. 443, 452-53, 456, 124 S.Ct. 906, 157 L.Ed.2d 867 (2004). Observing that deadlines set by statute generally are jurisdictional and those set by court-authored rules are not, the court accepted the analysis of three other circuits that recently characterized Rule 8002(a)’s 14-day deadline as jurisdictional because it is rooted in a statute, 28 U.S.C. § 158(c)(2), see In re Berman-Smith, 737 F.3d 997, 1002-03 (5th Cir. 2013); In re Caterbone, 640 F.3d 108, 111—12, 113 n. 5 (3d Cir. 2011); In re Latture, 605 F.3d 830, 836-37 (10th Cir. 2010). In response to Sobczak-Slomczewski’s assertion that he did not receive notice of the bankruptcy court’s order until the day of the deadline, August 19, the court explained that there are no equitable exceptions to a mandatory jurisdictional rule, and the bankruptcy court had not granted any extension of the time to appeal.

On appeal Sobczak-Slomczewski argues that in light of Kontriek and Bowles, the district court -wrongly concluded that Rule 8002(a)’s 14-day period for filing a notice of appeal is mandatory and jurisdictional. He reads Kontriek, 540 U.S. at 452-53, 456, 124 S.Ct. 906, as standing for the proposition that federal jurisdiction can be created or withdrawn only by an act of Congress and not the Federal Bankruptcy Rules. He also cites Bowles for the proposition that in order for a time limit found in a rule to be jurisdictional, it must be specified in an underlying statute. See 551 U.S. at 208-13, 127 S.Ct. 2360 (citing 28 U.S.C. § 2107(c); Fed. R. App. P. 4(a)(6)). Sobczak-Slomczewski maintains that Rule 8002(a)’s deadline is a claim-processing rule promulgated by the courts rather than one rooted in a statute that bars jurisdiction.

Congress confers jurisdiction on district courts to hear appeals from final orders of a bankruptcy court “taken in the same manner as appeals in civil proceedings generally are taken to the courts of appeals from the district courts and in the time provided by Rule 8002 of the Bankruptcy rules.” 28 U.S.C. § 158(a)(1), (c)(2). Federal Rule of Bankruptcy Procedure 8002(a) provides that the notice of appeal must be filed within 14 days of the date of entry of the judgment or order being appealed.1 We have previously stated without elaboration that the 14-day limit in Rule 8002(a) is jurisdictional. See, e.g., In re Salem, 465 F.3d 767, 774 (7th Cir. 2006); In re Bond, 254 F.3d 669, 673 (7th Cir. 2001); Stelpflug v. Fed. Land Bank of St. Paul, 790 F.2d 47, 48-49 (7th Cir. 1986).

[432]*432The Supreme Court’s more recent pronouncements in Kontrick, and Bowles, however, require us to re-evaluate whether the 14-day time limit to file a notice of appeal in Rule 8002(a) is jurisdictional. Jurisdiction may be withdrawn only if Congress has stated clearly its intent to deprive a court of jurisdiction either by explicit statutory command or by mandating that jurisdiction be deprived by rule of court. See Kontrick, 540 U.S. at 452-54, 124 S.Ct. 906; Bowles, 551 U.S. at 209-13, 127 S.Ct. 2360. In Kontrick the Court concluded that the time limits found in Bankruptcy Rules 4004 and 9006(b)(3) are not jurisdictional because these limits were prescribed by the Bankruptcy Rules, while the statutory provision conferring jurisdiction over objections to discharge contained no timeliness conditions. Kontrick, 540 U.S. at 452-53, 124 S.Ct.

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826 F.3d 429, 75 Collier Bankr. Cas. 2d 1508, 2016 U.S. App. LEXIS 10664, 62 Bankr. Ct. Dec. (CRR) 187, 2016 WL 3245340, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sobczak-slomczewski-ca7-2016.